Google has acquired some secret IP from renowned watchmaker Fossil in a multimillion-dollar deal.
Google and watchmaker Fossil Group have announced a deal worth approximately $40m. Under the agreement, Google will acquire some of Fossil’s smartwatch technology as well as members of the latter’s research and development division.
When the deal was announced on Thursday (17 January), shares in Fossil Group saw an approximate 8pc jump.
Success in wearables for Fossil
In the past number of years, smartwatches have become the fastest-growing category for Fossil, which includes brands such as Michael Kors, Diesel and Armani. The company has launched smartwatches across 14 of its owned and licensed brands.
Greg McKelvey, executive vice-president and chief strategy and digital officer at Fossil Group, said: “Fossil Group has experienced significant success in its wearables business by focusing on product design and development informed by our strong understanding of consumers’ needs and style preferences.
“We’ve built and advanced a technology that has the potential to improve upon our existing platform of smartwatches. Together with Google, our innovation partner, we’ll continue to unlock growth in wearables.”
A report from Wareable said the new deal is based on technology that the watchmaker itself acquired when it purchased wearables start-up Misfit in 2015.
A wellness wearable on the way?
Signs are pointing to the deal being related to health and fitness in some way, as this has been the key driver for smartwatches and wearables in the consumer market in general.
Stacey Burr, vice-president of product management in Wear OS at Google, said: “We saw some technology that they were developing that we thought could be brought out in a more expansive way if Google had that technology, and was not only able to continue to use it with Fossil but bring it to other partners in the ecosystem.”
She added: “Wearables, built for wellness, simplicity, personalisation and helpfulness, have the opportunity to improve lives by bringing users the information and insights they need quickly, at a glance.”
Fossil has been a consistent collaborator with Google, and its specialisation in hybrid smartwatches is a valuable asset for the search giant.
It is not uncommon for Google to acquire talent as it becomes more interested in hardware. Last year, the company purchased a significant portion of HTC’s smartphone team, which had been heavily involved in the development of Google Pixel phones.